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Rhode Island C-stores Rally Against Gas, Cigarette Tax Hikes

Cumberland Farms president warns of store closings.

April 1, 2009, 08:00 pm

PROVIDENCE, R.I. -- Dozens of Rhode Island convenience store owners and workers rallied Tuesday against proposals to raise the state's cigarette and gasoline taxes, saying any increase would cripple their businesses by driving customers into neighboring Massachusetts and encouraging tobacco sales over the Internet or on the black market, according to an Associated Press report.

A $7.2 billion spending plan scheduled for a House floor vote yesterday proposes raising the tax on a pack of cigarettes by $1, to $3.46. That would be the highest cigarette tax in the country. Lawmakers also are considering a proposal to increase the state gas tax from 31 cents to 33 cents per gallon, according to the report.

House lawmakers argue the increases, which are opposed by Republican Gov. Don Carcieri, are necessary to help the state close an estimated $370 million deficit in the fiscal year ending in June, the report said.

Retailers wearing stickers saying "No New Taxes" warned they would have to lay off employees and potentially close their stores if the tax increases were approved. Customers would drive into Massachusetts, which charges a cigarette tax of $2.51, they said. Sales of lottery tickets and other items critical to their business would suffer, they warned.

"We play a pivotal role in society, fulfilling needs for gasoline and staple products. If people don't come to our stores to buy cigarettes, they won't come to buy lottery tickets," Ari Haseotes, president and COO of the Cumberland Farms convenience store chain, said at a statehouse rally.

"It's myopic thinking to consider only cigarette taxes and not consider the ramifications on other parts of the store," he added. "There will be less competition, there will be less options for the consumer, there will be less employment, and all around, this will be a bad thing for the state."